How much coverage should you have? Many are seen buying insurance cover almost compulsorily, but the objectives are different. Some restrict the cover on the basis of premium others do mostly for tax purposes, without evaluating their individual life insurance needs. Indians have more or less understood the concept and importance of life insurance in their lives, though they still need to walk an extra mile in order to understand the adequacy of these plans as they lead up in their lives. Many are seen buying insurance cover almost compulsorily, but the objectives are different. Some restrict the cover on the basis of premium others do mostly for tax purposes, without evaluating their individual life insurance needs. Young professionals who are at the early stages of their career buy on life policies with smaller cover, but with time that needs to be scaled up. Reason being the value of an individual’s life increases as and when he progresses in his life like higher income, getting married or extension in a family. Old or New One: The sum of total life cover could be expanded in various ways as nowadays insurance policies are available both online and offline, the former being present for cheaper premiums though. Moreover, two different policies for same life cover could vary in premiums, but they should be assessed for benefits offered and riders attached. Today, a 30 year old non-smoker professional could get Rs. 1 crore cover by paying a premium in the range of Rs. 8,000 to Rs. 12,000, which otherwise could have cost several times more back in 2000s era. Often, insurers stumble on making a decision about if they should continue their existing policies or discard them for a new one. The answer is if the new policy cost a dozen times lower or is long tenured than the existing policy, then it is wise to discard the present one. 40 an important age: According to experts, 40 years of age should be a point when insurance needs should be comprehensively reviewed and necessary revisions should be done. The age is a critical point after which it is almost impossible to get a life cover at cheaper rates. Also, individuals should regularly review insurance needs and policies every fiver year. Source : India Infoline
Posted on: Tue, 30 Sep 2014 07:42:54 +0000
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